Wednesday, June 22, 2011

Making a killing.

People see the throes of agencies, bookstores, newspapers and the like and conclude that their struggles signify the death of entire industries and the demise of entire ways of assimilating information.

I wonder if there is another factor behind the demise of some of these entities. I just read an article in “The New York Times” by David Carr called “Ugly Details in Selling Newspapers.”

Carr reports on a book by James O’Shea, the former editor in chief of The Los Angeles Times, called “The Deal From Hell: How Moguls and Wall Street Plundered Great American Newspapers.” The gist of the matter is this: bankers attracted to newspapers and other media because of the ad revenue they generate ignored all ethics and common sense and milked these media properties for the fees they could collect from them. (Sounds like Dickens' "Bleak House,' don't it?)

Carr writes: "Here’s a note he found buried deep in court records from Jieun Choi, an analyst at JPMorgan Chase & Company, that demonstrated a breathtaking level of cynicism and self-dealing:

“There is wide speculation that [Tribune] might have so much debt that all of its assets aren’t gonna cover the debt in case of (knock-knock) you know what,” she wrote to a colleague, in a not very veiled reference to bankruptcy. “Well that’s what we are saying, too. But we’re doing this ‘cause it’s enough to cover our bank debt. So, lesson learned from this deal: our (here I mean JPM’s) business strategy for TRB but probably not only limited to TRB is ‘hit and run.’ ”

"She then went on to explain just how far a bank will go to “suck $$$ out of the (dying or dead?) client’s pocket” in terms that are too graphic to be repeated here or most anywhere else."

Maybe because I have a long memory I can't help but recall when ad agencies were considered cash cows. They generated a lot of revenue and needed virtually no capital plant. This of course attracted the money men.

They figured out ways to suck ad agencies dry.

The industry, like the media industry, didn't so much die as it's been killed.

Of course I'd be naive if I said there weren't fundamental issues with the media industry and the ad industry. But, I believe, these issues pale in comparison to the pillage perpetrated by those outside the industry who saw a way to make a killing and then killed.

In the scenario that Carr relates, the Los Angeles Examiner and the Chicago Tribune

1 comment:

peggy said...

the fourth power is being killed. slowly but surely. those fools dont know what they are doing. the underfinancing of real journalism has consequences in society that no one can foresee, but, as the last sentence of the article states, they will be greater than people might think.

i believe that if there is no reliable news source, it leaves room for speculation. not a good thing for societies which suffer from spin, lies, speculation and conspiracy theory overkill already.